Blockchain Data Links Tether ‘Attack’ to 2015 Exchange Hack

As we reported earlier today on the Tether attack, wherein at least $31 million worth of crypto was stolen from the Hong Kong based startup, Tether, which specializes in providing a treasury service for US dollar backed tokens.

From what was found out by an individual detective in the community, it seems that the hackers who were behind this recent $31 million Tether heist may also very likely be connected to a similar attack on an exchange which happened two years ago. This cyber detective was able to piece this together through combing through the data that is made available and transparent by the inherent nature of the blockchain.

Tether.to, is a startup that runs the tether treasury and states itself to be a service which converts cash into digital currency, to anchor or ‘tether’ the value to the price of national currencies like the US dollar, the Euro and other fiat currencies. The company behind the dollar-backed cryptocurrency tether stated on Monday evening that there was a theft which caused a stir within the community, igniting speculation around the token, its supporters and it’s potential role in manipulation of the market and bitcoin price movements. The speculation and rumors are not unfounded as this company has seen it’s fair share of controversy in its past.

Tether Woes

The emerging business is no stranger to dark clouds and bad spells, as it has earned it’s questionable reputation through several missteps. The Hong Kong incorporated company stated earlier that their U.S. dollar wire exchanges of funds had been blocked. This led many to wonder if there was something else going on and if their tokens were truly backed by the expected fiat currencies. As reported by Bloomberg, the utility of the tokens may be the largest question surrounding tether. On the legal section of its website, Tether says it’s not obligated to let customers exchange their tokens for dollars.

“Tethers are not money and are not monetary instruments,” the company says. “There is no contractual right or other right or legal claim against us to redeem or exchange your tethers for money. We do not guarantee any right of redemption or exchange of tethers by us for money.”

There have also been suspicions surrounding their relationship with Bitfinex, (another exchange that was hacked).

The availability of the public blockchain data has shed light on even more interesting events surrounding Tether and past historical events.

A number of interested parties conducting some investigations of their own and found some answers. Through posts on r/bitcoin and r/cryptocurrency subreddits, by a user named SpeedflyChris has connected this recent attack to one that occurred in 2015 on Bitstamp to the tune of $5 million dollars.

SpeedlfyChris based his research around a specific wallet, where one can find transactions that date back to bitstamp, running all the way back two years to January 2015.

The reddit user goes on to make note of the particular address and it’s activities, wherein the wallet conducted transactions, being mostly on the receiving end of tokens from Tether’s treasury wallet.

The research shows that the main address involved in the hack ties to back to the incidence that happened with the China-based btc exchange Huobi in 2015, there’s also ties to another popular exchang, www.localbitcoins.com. Read full details of SpeedlyFlyChris’s discoveries here.

Where to from here?

It seems that the community in general believes that these hacks will be resolved as the price of bitcoin was only taken down slightly before bouncing back up and staying at a level above $8000.

These activities may call for further watchdogs from the community who will be able to call out bad behavior within bounds and weed out the bad actors.

By | 2017-11-22T22:45:19+00:00 November 22nd, 2017|News|0 Comments

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